Euro leaps as ECB stays course; dollar stays weak

Reuters with CNBC.com

Wednesday, 2 Oct 2013 | 4:34 PM ETReuters

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The euro soared to an eight-month high versus the dollar on Wednesday as European Central Bank President Mario Draghi stuck with the bank's current stance on monetary policy and said the ECB is prepared to do more should the economy warrant it.

The ECB left interest rates unchanged, holding off on any fresh policy action for now while it waits to see whether a fragile euro zone recovery strengthens.

"The exchange rate is not a policy target for the ECB. The target for the ECB is medium-term price stability," Draghi said.

The euro rallied to its highest since February against the dollar, reaching a peak of $1.3606. It last traded at $1.3581, up 0.4 percent on the day.

The dollar index, which tracks the greenback against a basket of six major currencies, fell as low as 79.781, its lowest since February. It last traded 0.4 percent lower at 79.90. The euro dominates the composition of the index.

The dollar remained subdued as the ongoing political wrangling in the U.S., which has led to a partial government shutdown, showed no signs of a resolution.

The greenback was down 0.6 percent at 97.36 yen. It earlier slid 97.22 yen, its lowest since late-August.

The yen, which tends to benefit in times of market turmoil, also rose against the euro. The single currency pared losses after the ECB's Draghi's comments, last trading down 0.2 percent at 132.23 yen, according to Reuters data.